{"operation":"document","citation":"CPF 120166001M","title":"MAGELLAN TERMINALS HOLDINGS, LP — Notice of Amendment","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2016-12-15","effective_on":null,"summary":"CLOSED notice of amendment citing 195.402(c)(3).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120166001m.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120166001m.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120166001m","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120166001M","body":"Notice of Amendment involving MAGELLAN TERMINALS HOLDINGS, LP. PHMSA's enforcement data identifies the cited regulation as 195.402(c)(3). The case was opened on 2016-12-15 and is reported as closed as of 2017-05-24. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120166001M_Closure Letter_05242017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120166001M/120166001M_Closure%20Letter_05242017.pdf\n\n120166001M_Closure Letter_05242017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120166001M/120166001M_Closure%20Letter_05242017_text.pdf\n\n120166001M_Notice of Amendment_12152016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120166001M/120166001M_Notice%20of%20Amendment_12152016.pdf\n\n120166001M_Notice of Amendment_12152016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120166001M/120166001M_Notice%20of%20Amendment_12152016_text.pdf\n\n120166001M_Order Directing Amendment_04182017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120166001M/120166001M_Order%20Directing%20Amendment_04182017.pdf\n\n120166001M_Order Directing Amendment_04182017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120166001M/120166001M_Order%20Directing%20Amendment_04182017_text.pdf\n\n120166001M_Order Directing Amendment_04182017_text.pdf\n\nApril 18, 2017\nMr. Michael N. Mears\nChairman of the Board, President and Chief Executive Officer\nMagellan Terminals Holdings, LP\nOne Williams Center, Mail Drop 27\nTulsa, OK 74172\nRe: CPF No. 1-2016-6001M\nDear Mr. Mears:\nEnclosed please find the Order Directing Amendment issued in the above-referenced case. It\nmakes a finding of inadequate procedures and requires that Magellan amend certain of its\noperating and maintenance procedures. In addition, it finds that Magellan has addressed certain\ninadequacies in its procedures that were cited in the Notice of Amendment. When the\namendment of procedures is completed, as determined by the Director, Eastern Region, this\nenforcement action will be closed. Service of the Final Order is deemed effective as provided\nunder 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Robert Burrough, Acting Director, Eastern Region, OPS\nMr. Michael Pearson, VP, Technical Services, Magellan Terminals Holdings, LP\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\nIn the Matter of )\nMagellan Terminals Holdings, LP, ) CPF No. 1-2016-6001M\na subsidiary of Magellan Midstream )\nPartners, LP, )\n)\n)\n)\nRespondent. )\n____________________________________)\nORDER DIRECTING AMENDMENT\nFrom May 18, 2015, through May 22, 2015, pursuant to 49 U.S.C. § 60117, a representative of\nthe Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the procedures of Magellan Terminals\nHoldings, LP (Magellan or Respondent), in New Haven, Connecticut. Respondent is a\nsubsidiary of Magellan Midstream Partners, LP, which operates a 9,700-mile refined-products\npipeline system with 53 connected terminals and 27 independent terminals, as well as a 1,100-\nmile ammonia pipeline system.1 Magellan Midstream Partners, LP, also owns 2,100 miles of\ncrude-oil pipelines and storage facilities, and operates five marine terminals.2\nAs a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent,\nby letter dated December 15, 2016, a Notice of Amendment (Notice). The Notice alleged certain\ninadequacies in Magellan’s procedures for operations, maintenance and emergencies, and\nproposed, in accordance with 49 C.F.R. § 190.206, that Respondent amend its procedures.\nMagellan responded to the Notice by letter dated January 13, 2017 (Response). Respondent\ncontested Item 1 in the Notice and submitted amended procedures for Items 2 and 3 in the\nNotice. Respondent did not request a hearing and therefore has waived its right to one. The\nDirector has reviewed the amended procedures submitted by Respondent on January 13, 2017.\nBased on the result of this review, I find that Respondent’s procedures were inadequate but that\nits amendments adequately address Items 2 and 3 in the Notice. For the reasons discussed\nbelow, I find that the procedures in Item 1 are inadequate and must be amended.\n1 Magellan Midstream Partners, LP website, available at http://www.magellanlp.com/AboutUs/Default.aspx (last\naccessed February 21, 2017).\n2 Id.\n\n\n\nCPF No. 1-2016-6001M\nPage 2\nFINDING OF INADEQUATE PROCEDURES\nThe Notice alleged certain inadequacies in Respondent’s procedures. Respondent contested the\nallegation with respect to Item 1 in the Notice. I have reviewed the procedure and considered the\nfollowing factors: relevant available pipeline safety data; whether the plan is adequate for\nRespondent’s unique facilities and for the facilities’ particular location; the reasonableness of the\nprocedure; and the extent to which the procedure contributes to public safety. Upon review of\nthe procedure under 49 C.F.R. § 190.206, I find the following procedure to be inadequate, as\nfollows:\nItem 1: The Notice alleged that Respondent’s procedures are inadequate to assure safe operation\nof its pipeline facilities with respect to 49 C.F.R. § 195.310(b), which states:\n§ 195.310 Records.\n(a) A record must be made of each pressure test required by this subpart . . . .\n(b) The record required by paragraph (a) of this section must include:\n(1) The pressure recording charts;\n(2) Test instrument calibration data;\n(3) The name of the operator, the name of the person responsible for making\nthe test, and the name of the test company used, if any;\n(4) The date and time of the test;\n(5) The minimum test pressure;\n(6) The test medium;\n(7) A description of the facility tested and the test apparatus;\n(8) An explanation of any pressure discontinuities, including test failures, that\nappear on the pressure recording charts;\n(9) Where elevation differences in the section under test exceed 100 feet (30\nmeters), a profile of the pipeline that shows the elevation and test sites over the\nentire length of the test section; and\n(10) Temperature of the test medium or pipe during the test period.\nThe Notice alleged that Respondent’s procedure, 7.10-ADM-007 – Aboveground Storage Tank\nHydrostatic Testing Procedure, failed to include sufficient guidance on documenting hydrostatic\ntesting of breakout tanks when tested in accordance with § 195.432.3 Section 2.4 of 7.10-ADM-\n007 entitled Documentation states, in part, that “[h]ydrostatic test results shall be recorded on the\nHydrostatic Test Form . . .” However, neither the procedure nor the form addresses certain\nrecords of the test. For example, when performing a hydrostatic test, § 195.310(b) lists records\nthat must be kept, including: pressure-recording charts; test instrument-calibration data;\nminimum test pressure; an explanation of any pressure discontinuities, including test failures,\nthat appear on the pressure-recording charts; and, where elevation differences in the section\nunder test exceed 100 feet (30 meters), a profile of the pipeline showing the elevation and test\nsites over the entire length of the test section.\nIn its Response, Magellan stated that according to 49 C.F.R. §195.432, operators must inspect in-\n3 Section 195.432 requires operators to inspect their breakout tanks in accordance with American Petroleum\nInstitute Standard 653 (API Std 653) (incorporated by reference, see § 195.3).\n\n\n\nCPF No. 1-2016-6001M\nPage 3\nservice atmospheric breakout tanks according to API Std 653, which does not include specific\ndocumentation requirements. Additionally, Magellan stated its Hydrostatic Test Form – 07-\nFORM-0053 – is used to document parameters applicable to an atmospheric storage tank.\nFinally, Magellan argued that, according to a separate Notice of Amendment issued to a different\noperator in 2012 (CPF No. 4-2012-5008M), the requirements of § 195.310(b) are specific for\nhydrostatically testing pipelines.\nI disagree. First, even if API Std 653 does not include records requirements, PHMSA’s\nregulations in Part 195 do contain such records requirements in § 195.310(b). There are\nimportant safety reasons to keep records documenting a hydrostatic test. For example, a\npressure-recording chart documents the test pressure maintained over the entire test period. Test\ninstrument calibration data assures pressure readings observed during the test are accurate.\nThese and other vital records are necessary to validate the test and determine the integrity of the\nbreakout tank. Since Respondent’s hydrostatic test procedures do not require keeping these\nrecords, I find that the company’s procedures are inadequate to assure safe operation.\nWith respect to the 2012 matter in CPF No. 4-2012-5008M, Respondent cited to the Notice of\nAmendment in that case but not the Final Order Directing Amendment. In the Matter of\nEnterprise Crude Pipelines, LLC (Enterprise), Order Directing Amendment, C.P.F. No.\n4-2012-5008M (August 1, 2013)4 stated that the documentation and records-retention\nrequirements of § 195.310 apply to hydrostatic testing records for breakout tanks. In that case,\nthe operator was ordered to revise its procedures to include the record-retention requirements of\n§ 195.310(b) for testing its aboveground storage tanks.\nAccordingly, I find that Magellan’s procedures for aboveground storage tank hydrostatic testing\nare inadequate to ensure safe operation of its pipeline system. Respondent must revise\n7.10-ADM-007 – Aboveground Storage Tank Hydrostatic Testing Procedure to include all of the\nrecords listed in 49 C.F.R. § 195.310(b).\nPursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190.206, Magellan is ordered to:\n1. Submit revised procedures pursuant to Item 1 above within 30 days following\nreceipt of this Order. All documentation demonstrating compliance with the\nOrder must be submitted to the Director.\n2. It is requested (not mandated) that Magellan maintain documentation of the safety\nimprovement costs associated with fulfilling this Order and submit the total to\nRobert Burrough, Acting Director, Eastern Region, Pipeline and Hazardous\nMaterials Safety Administration. It is requested that these costs be reported in\ntwo categories: 1) total cost associated with preparation/revision of plans,\nprocedures, studies and analyses; and 2) total cost associated with replacements,\nadditions and other changes to pipeline infrastructure.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\n4 Available at www.phmsa.dot.gov/pipeline/enforcement.\n\n\n\nCPF No. 1-2016-6001M\nPage 4\nextension.\nFailure to comply with this Order may result in administrative assessment of civil penalties not\nto exceed $200,000 for each violation for each day the violation continues or in referral to the\nAttorney General for appropriate relief in a district court of the United States.\nUnder 49 C.F.R. § 190.243, Respondent has a right to submit a Petition for Reconsideration of\nthis Order. The petition must be sent to: Associate Administrator, Office of Pipeline Safety,\nPHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a\ncopy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA will accept\npetitions received no later than 20 days after receipt of service of this Final Order by the\nRespondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.243. Unless the Associate Administrator, upon request, grants a\nstay, the terms and conditions of this Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nApril 18, 2017\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n120166001M_Closure Letter_05242017_text.pdf\n\nOVERNIGHT EXPRESS DELIVERY\nMay 24, 2017\nMr. Michael Pearson\nVP, Technical Services\nMagellan Terminals Holdings, LP\nOne Williams Center, Mail Drop 27\nTulsa, OK 74172\nCPF 1-2016-6001M\nDear Mr. Pearson:\nFrom May 18 through May 22, 2015; a representative from the Pipeline and Hazardous Materials\nSafety Administration (PHMSA), pursuant to chapter 601 of 49 United States Code, inspected\nMagellan Terminals Holdings, LP’s (Magellan) procedures in New Haven, Connecticut. As a\nresult of the inspection, Magellan was issued a Notice of Amendment on December 15, 2016;\nwhich proposed amendment of its procedures.\nMagellan submitted its amended procedures on January 13, 2017. In its response, Magellan\nrequested that Item #1 of the NOA be removed. PHMSA responded on April 18, 2017; with an\nOrder Directing Amendment, directing Magellan to revise the procedures for Item #1 of the NOA.\nMagellan then submitted its amended procedures on May 17, 2017. My staff reviewed the\namended procedures, and it appears that the inadequacies outlined in this Notice of Amendment\nhave been corrected.\nThis letter is to inform you that no further action is necessary, and this case is now closed. Thank\nyou for your cooperation.\nSincerely,\nRobert Burrough\nActing Director, Eastern Region\nPipeline and Hazardous Materials Safety Administration\n\n120166001M_Notice of Amendment_12152016_text.pdf\n\nNOTICE OF AMENDMENT\nOVERNIGHT EXPRESS DELIVERY\nDecember 15, 2016\nMr. Michael Pearson\nVP, Technical Services\nMagellan Terminals Holdings, LP\nOne Williams Center, Mail Drop 27\nTulsa, OK 74172\nCPF 1-2016-6001M\nDear Mr. Pearson:\nFrom May 18 – May 22, 2015, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected Magellan\nTerminals Holdings, LP’s (Magellan) procedures in New Haven, Connecticut.\nOn the basis of the inspection, PHMSA has identified the apparent inadequacies found within Magellan’s\nplans or procedures, as described below:\n1. § 195.402 Procedural manual for operations, maintenance, and emergencies\n(c) Maintenance and normal operations. The manual required by paragraph (a) of this section\nmust include procedures for the following to provide safety during maintenance and normal\noperations:\n(3) Operating, maintaining, and repairing the pipeline system in accordance with each of the\nrequirements of this subpart . . .\nMagellan’s procedures for operating, maintaining, and repairing the pipeline system in accordance with\neach of the requirements of this subpart were inadequate for aboveground storage tanks. Specifically, the\nprocedures failed to provide sufficient guidance on documenting hydrostatic testing of Breakout Tanks\nas per §195.432.\nMagellan’s Aboveground Storage Tank Hydrostatic Testing Procedure was inadequate in that Magellan\nfailed to require records be kept as per the requirements in §195.310(b).\nDuring the inspection, the PHMSA inspector reviewed Magellan’s 7.10-ADM-007 – Aboveground\nStorage Tank Hydrostatic Testing Procedure revision 2 dated 2/13/13. Section 2.4 Documentation states\nin part that, “Hydrostatic test results shall be recorded on the Hydrostatic Test Form . . .” Neither the\nprocedure, nor the referenced form included sufficient guidance to address the requirements of\n\n\n\n1-2016-6001M\n§195.310(b) such as:\n1. The pressure recording charts\n2. Test instrument calibration data\n3. The minimum test pressure\n4. An explanation of any pressure discontinuities, including test failures, that appear on the pressure\nrecording charts\n5. Where elevation differences in the section under test exceed 100 feet (30 meters), a profile of the\npipeline that shows the elevation and test sites over the entire length of the test section\n2. § 195.402 Procedural manual for operations, maintenance, and emergencies\n(c) Maintenance and normal operations. The manual required by paragraph (a) of this section\nmust include procedures for the following to provide safety during maintenance and normal\noperations:\n(3) Operating, maintaining, and repairing the pipeline system in accordance with each of the\nrequirements of this subpart and subpart H of this part\nMagellan’s procedures for operating, maintaining and repairing the pipeline system in accordance with\neach of the requirements of this subpart were inadequate for aboveground storage tanks. Specifically,\nMagellan’s Out-Of-Service Inspection Procedure for conducting internal inspections of breakout tanks\nwas inadequate in that it failed to provide sufficient guidance on documentation of inspection and\nmaintenance of out-of-service breakout tanks per §195.432(b).\nDuring the inspection, the PHMSA inspector reviewed Magellan’s Out-Of-Service Inspection Procedure\n7.10-ADM-005 rev 4, dated 1/1/2015. Section 2.15.1 states that: “The out-of-service inspection shall be\nrecorded on a form provided by the API 653 inspection company performing the inspection.” Section\n2.15, Documentation, provides guidance on what information must be documented. The procedure does\nnot provide guidance for retention of records in accordance with API Std. 653 Section 6.9.1.\n3. § 195.402 Procedural manual for operations, maintenance, and emergencies\n(c) Maintenance and normal operations. The manual required by paragraph (a) of this section\nmust include procedures for the following to provide safety during maintenance and normal\noperations:\n(3) Operating, maintaining, and repairing the pipeline system in accordance with each of the\nrequirements of this subpart and subpart H of this part\nMagellan’s procedures for operating, maintaining and repairing the pipeline system in accordance with\neach of the requirements of this subpart were inadequate for aboveground storage tanks. Specifically,\nMagellan’s In-Service Inspection Procedure for conducting external inspections of breakout tanks was\ninadequate in that it failed to provide sufficient guidance on documentation of inspection and maintenance\nof out-of-service breakout tanks per §195.432(b).\nDuring the inspection, the PHMSA inspector reviewed Magellan’s In-Service Inspection Procedure 7.10-\nADM-006 rev 7, dated 1/1/2015. Section 2.12.1 states that: “The in-service inspection shall be recorded\non a form provided by the API 653 inspection company performing the inspection.” Section 2.12,\nDocumentation provides guidance on what information must be documented. The procedure does not\nprovide guidance for retention of records in accordance with API Std. 653 Section 6.9.1.\n120166001M_NOA_12152016 Page 2 of 3\n\n\n\n1-2016-6001M\nResponse to this Notice\nThis Notice is provided pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190.206. Enclosed as part of\nthis Notice is a document entitled Response Options for Pipeline Operators in Compliance\nProceedings. Please refer to this document and note the response options. Be advised that all material\nyou submit in response to this enforcement action is subject to being made publicly available. If you\nbelieve that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C.\n552(b), along with the complete original document, you must provide a second copy of the document\nwith the portions you believe qualify for confidential treatment redacted, and an explanation of why you\nbelieve the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b).\nFollowing the receipt of this Notice, you have 30 days to submit written comments, revised procedures,\nor a request for a hearing under §190.211. Failure to respond within 30 days of receipt of this Notice\nconstitutes a waiver of your right to contest the allegations in this Notice, and authorizes the Associate\nAdministrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you, and\nto issue an Order Directing Amendment. If your plans or procedures are found inadequate as alleged in\nthis Notice, you may be ordered to amend your plans or procedures to correct the inadequacies (49 C.F.R.\n§ 190.206). If you are not contesting this Notice, we propose that you submit your amended procedures\nto my office within 30 days of receipt of this Notice. This period may be extended by written request for\ngood cause. Once the inadequacies identified herein have been addressed in your amended procedures,\nthis enforcement action will be closed.\nIt is requested (not mandated) that Magellan maintain documentation of the safety improvement costs\nassociated with fulfilling this Notice of Amendment (preparation/revision of plans, procedures) and\nsubmit the total to Robert Burrough, Acting Director, Eastern Region, Pipeline and Hazardous Materials\nSafety Administration. In correspondence concerning this matter, please refer to CPF 1-2016-6001M\nand, for each document you submit, please provide a copy in electronic format whenever possible.\nSincerely,\nRobert Burrough\nActing Director, Eastern Region\nPipeline and Hazardous Materials Safety Administration\nEnclosure: Response Options for Pipeline Operators in Compliance Proceedings\n120166001M_NOA_12152016 Page 3 of 3","truncated":false,"body_characters":21255}